Possible scenario
Contained Afar Clashes
32% Chance
The diplomatic break hardens into limited fighting along the Afar-Eritrea frontier, but neither government immediately commits to a nationwide war. This scenario is plausible because local commanders may test positions after Eritrea's incursion while political leaders still avoid a broader campaign.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +0.3%
Portfolio impact
S&P 500-0.3%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.